Reducing costs to a more favorable business environment

Details

16 August 2019

Council for Economic Development of the Municipality of Bijelo Polje, held its 8th meeting at which they discussed the draft of the new Decision on local administrative fees, as well as the membership fee for the Tourist Organization.

Mayor Peter Smolović said that Bijelo Polje to be competitive by international standards of competitiveness index, and that suggested that everything the Municipality does not earn income should be abolished, and other fees to look at whether it can be reduced. He said he wanted to Bijelo Polje is a city with the lowest number of taxes, and that the new Decision envisages reduction of price payment of a significant number of existing taxes.

Veselin Merdović from the Public Revenue Administration has presented details of the proposed new Regulation, according to which the calculation of contributions will be carried out on the basis of operating results, which according to him will be further relief for the economy.

Professor Milivoje Radovic suggested that the contribution of the Tourist Organization - the percentage that goes to the National Tourist Organization decreases and increase the percentage that goes to the local Tourist organization.

The Council for Economic Development of the Municipality are summarized impressions from the First Bijelo Polje Business Forum, which was rated as successful and adopted the proposed conclusions of the Forum.

Based on the discussions held with the Board, may make a general conclusion that in Bijelo Polje there is a favorable business environment, which is constantly improving, and that is also a call to all potential investors to invest and develop their business in our community.

As individual conclusions we highlight the following:

Opening and development of business zones, ongoing programs and incentives for business development as well as ongoing activities on removing barriers to business and a number of other measures implemented by local governments, which contribute to a better quality of life conditions of the citizens, are the backbone of growth and development of the Municipality;

We expect a continuation of the accelerated investment cycle contribute to the young and educated, with their ideas and entrepreneurial inclinations remain in Bijelo Polje and thus contribute to its development and Municipalities;

Taxes and contributions must be significantly reduced in northern Montenegro because of developmental delay in relation to the rest of the country and the problem of high unemployment;

For all the restaurants in the north who have a certain level of quality of service tax VAT rate should be reduced to 7% for reasons of strategic commitment to the development of northern summer and winter tourism;

Analyze the impact of tax rates that you stimulate agricultural production and consider whether it can further reduce VAT on inputs which are used as raw materials for agricultural production.

The Government of Montenegro, its investment activities on the construction of the highway, investments at the opening of the mountain Bjelasica and Đalovića gorge, from an entire set of active programs for improving the competitiveness of the economy has created and creates preconditions to Bijelo Polje is a city in which the investments.

R E L I E F S:

Companies and entrepreneurs referred to in Article 3 shall be introduced and identified the following financial incentives:

exemption from payment of communal fee for construction land,

exemption from payment of the fee for the use of municipal roads,

exemption from payment of surtax on personal income tax,

exemption from paying tax on real estate above 0.1% of the market value of the real estate.

Article 5

The tax exemption from Article 4 item 1 investor (company and entrepreneur) is realized in the amount up to 7,000.00 euros per one newly employed worker, or newly opened workplace, and can be used only if by investing, it increases the number of employees for 5 or more employees.

The incentives referred to in Article 4 item 2, 3 and 4 of this Decision shall also apply to existing companies and entrepreneurs in the area of ​​the Bijelo Polje municipality for the extension of the economic activity referred to in Article 3 of this Decision, and can only be used if the expansion increases the number of employees for 5 or more workers and is valid for a period of 3 (three) years.

Note: The new Regulation on Business Zones was adopted on December 13, 2016 and was published in the Official Journal of Montenegro, No. 77/2016.

The municipality is obliged to until 21.06.2018, in accordance with the Government Regulation, adopt a new Business Zone Decision.

We are also referring to the Decision on the fee for communal equipment for construction land that was published on 29.12.2015. in the "Official Journal of Montenegro - Municipal Regulations" No. 48/15.

Tax reliefs – New Government Regulation on business zones

Article 15

For employed people working in a business zones, the business zone user does not pay:

1) Contributions for compulsory social insurance for salaries (contributions for pension and disability insurance, contribution for health insurance, unemployment insurance contribution) and contributions for the Labor Fund;

2) Personal income tax;

The amount of the relief referred to in paragraph 1 of this Article can not exceed the maximum allowable aid intensity of 60% for medium and 70% for small companies, in accordance with the regulations governing state aid.

The user of the business zone may use the incentives referred to in paragraph 1 of this Article, for a maximum period of five years from the date of employment of persons in the business zone.

For the employee referred to in paragraph 1, item 1 of this Article, the user of the business zone calculates, suspends and pays the employee from the earnings of the employee: the contribution for the pension and invasive insurance at the rate of 15,0% contribution to health insurance at a rate of 8.5% and contribution to insurance against unemployment at a rate of 0.5% upon payment of earnings.

The basis for calculating the contribution referred to in paragraph 1 of this Article shall be gross employee earnings.

The user of the business zone pays the calculated surtax of income tax.

In addition to the relief referred to in paragraph 1 of this Article, the beneficiary of the business zone shall also exercise the right to other incentives in accordance with the law and special regulations governing state aid, although they must not exceed the maximum allowable amount of incentive in accordance with paragraph 2 of this Article.